"Causing a Stir, the Entire Restaurant Business is Shaken." How Service Charges Were "Canceled" in Kyrgyzstan's Catering Industry

Елена Краснова Exclusive
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‘They’ve made a mess, the entire restaurant business is shaking.’ How service charges were ‘canceled’ in Kyrgyzstan

Recent changes in Kyrgyzstan's legislation aimed at improving conditions for café and restaurant customers have proven ineffective and have had the opposite effect. The ban on separately indicating the service charge on the bill did not lead to lower prices; on the contrary, many establishments have raised the cost of dishes, as reported by Azattyk Asia.

Since January 1, a ban has been introduced in the country on indicating service charges separately from the cost of dishes. Previously, bills often included a service fee of about 15% of the total amount. However, now, despite the disappearance of this item, the final price has not decreased.

Gulzat Raimbekova, head of the Hotel and Restaurant Association Horeca, notes that without this 15% surcharge, the restaurant business will find itself in a difficult position, forcing owners to raise prices.

“We warned six months ago that it was impractical to remove this charge, as costs do not disappear anywhere. They will simply be included in the price of the dishes. When we voiced this opinion, the Ministry of Economy and the Antimonopoly Service told us that we could include these costs in the price,” Raimbekova explains.

The discussion of the service charge issue has reached the level of parliament, where some deputies expressed dissatisfaction with the government's actions.

“I don’t understand why there was a need to interfere in this area. Now the entire restaurant business is under stress. It’s no longer possible to reverse this decision,” said Deputy Dastan Bekeshev at a parliamentary meeting.

Government representatives assert that the main goal of the changes was to protect consumer rights and that including the service charge in the price of dishes contradicts the principles of this decision.

“According to the law, payment for service must remain voluntary. Including this amount in the bill is a violation of consumer rights, and we aimed to correct this,” commented Daniyar Amangeldiev, First Deputy Prime Minister of Kyrgyzstan.

This statement caused confusion among restaurateurs; however, many preferred not to speak publicly. An Azattyk Asia correspondent attempted to obtain comments from several establishments in Bishkek but faced refusals.

“I would prefer not to discuss this, as I fear the consequences. The situation is complicated right now,” said an administrator of one of the restaurants.

Gulzat Raimbekova, representing the interests of over 80 large establishments, claims that she expresses the opinions of restaurant owners without fear. She emphasizes that serving customers is not an abstract service but involves real costs, including employee salaries, taxes, rent, and equipment maintenance. If these costs cannot be covered, she warns, the business will not survive, and 400,000 workers in this sector will be left without jobs.

“Such a level of unemployment is possible only because we are being dictated how to set prices for services,” Raimbekova expresses her dissatisfaction.

Ultimately, the question of who benefits from these changes remains open. Consumers also find themselves in an ambiguous situation: on one hand, the line in the bill that many considered an imposed service has disappeared; on the other hand, the cost of a meal in a restaurant has not only not decreased but in some cases has increased.
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